141
is reprocessed for return to the same use. This is the interpretation embodied in
China’s “Circular Economy” laws, for example. In the Loop Economy, ownership
changes with each loop, each owner aiming to achieve the highest profit when passing on material goods.
The “Loop” or “cradle-to-cradle” concept is still framed in terms of flows and
therefore overlooks ways to optimise the physical and economic performance of the
economy based on optimising the use of the stock. An example of good stock management is provided by the 2008 EU Waste Directive, which appropriately calls for
the reuse and service-life extension of goods as priorities, putting waste prevention
before waste management. The Lake economy uses the same loops as the Loop
economy, but with a focus on value preservation through stewardship and without
changes in ownership: The main economic actors in such an economy are here
termed “fleet managers”: they operate a fleet of similar goods, such as the vehicles
of haulage or transport companies, and maintain their components (e.g. engines and
tyres in the case of road vehicles). These owners may have their goods repaired or
remanufactured by independent service companies. The focus is on managing the
stock rather than the flows: “fleet managers” maintain ownership of their stock and
therefore profit from the economic advantages of re-use and remanufacturing
strategies.
If economic actors are selling performance, through business models such as
“goods as services” or “molecules as services”, which means earning revenue and
Local Economy
Regional Supply Cycles
EXTRACTION &
PROCESSING
Global Supply Chains
MANUFACTURING
REPROCESSING
UTILISATION
OF STOCK
REMANUFACTURING
Virgin
Materials
Downcycling
or waste
Secondary
materials
LOOP Ϯ
Used
goods
RE-USE
LOOP ϭ
Used
materials
Fig. 7.1 The basic loops of a circular economy (Adapted from Stahel and Reday-Mulvey 1976)
7 Stocks and Flows in the Performance Economy
is reprocessed for return to the same use. This is the interpretation embodied in
China’s “Circular Economy” laws, for example. In the Loop Economy, ownership
changes with each loop, each owner aiming to achieve the highest profit when passing on material goods.
The “Loop” or “cradle-to-cradle” concept is still framed in terms of flows and
therefore overlooks ways to optimise the physical and economic performance of the
economy based on optimising the use of the stock. An example of good stock management is provided by the 2008 EU Waste Directive, which appropriately calls for
the reuse and service-life extension of goods as priorities, putting waste prevention
before waste management. The Lake economy uses the same loops as the Loop
economy, but with a focus on value preservation through stewardship and without
changes in ownership: The main economic actors in such an economy are here
termed “fleet managers”: they operate a fleet of similar goods, such as the vehicles
of haulage or transport companies, and maintain their components (e.g. engines and
tyres in the case of road vehicles). These owners may have their goods repaired or
remanufactured by independent service companies. The focus is on managing the
stock rather than the flows: “fleet managers” maintain ownership of their stock and
therefore profit from the economic advantages of re-use and remanufacturing
strategies.
If economic actors are selling performance, through business models such as
“goods as services” or “molecules as services”, which means earning revenue and
Local Economy
Regional Supply Cycles
EXTRACTION &
PROCESSING
Global Supply Chains
MANUFACTURING
REPROCESSING
UTILISATION
OF STOCK
REMANUFACTURING
Virgin
Materials
Downcycling
or waste
Secondary
materials
LOOP Ϯ
Used
goods
RE-USE
LOOP ϭ
Used
materials
Fig. 7.1 The basic loops of a circular economy (Adapted from Stahel and Reday-Mulvey 1976)
7 Stocks and Flows in the Performance Economy